India's Trade Exposure to Strait of Hormuz Exceeds Many Asian Counterparts

India's Trade Exposure to Strait of Hormuz Risks

Key Findings:

• India's total trade exposure to countries around the Strait of Hormuz stands at approximately 16%, with over a third of its imports dependent on the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Iran.
• This dependence is higher than that of several other Asian economies, including South Korea (11%) and Japan (10%).
• The Strait of Hormuz is a critical maritime chokepoint linking major Gulf energy producers with global markets.

Energy Trade Vulnerability:

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• Japan sources 90% of its oil imports from Hormuz-linked countries, making it one of the most exposed economies to supply disruptions.
• India's dependence on energy imports from the region is lower but still significant, with around 46% of its crude oil imports originating from the region.
• China sources 38% of its oil imports from Hormuz nations, compared to 20% for Indonesia and 12% for European Union nations.

Liquefied Natural Gas (LNG) Imports:

• India's exposure to LNG imports from Hormuz nations is even greater, with over 50% of its imports coming from the region.
• China's LNG imports from the region stand at 25%, while South Korea's imports are at 23%, and globally, the figure is around 19%.

Industrial and Agricultural Trade:

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• The Gulf's importance extends beyond hydrocarbons, feeding industrial supply chains across Asia and Europe.
• Nearly two-thirds of the chemicals used in detergents and cosmetics in China are sourced from Hormuz countries.
• The corridor is also important for agricultural and food trade, with nearly all of China's saffron imports and over 61% of the European Union's saffron imports coming from the region.

Pakistan's Higher Exposure:

• Pakistan's total imports heavily dependent on countries linked to the Strait of Hormuz stand at nearly 33%.
• Almost all of Pakistan's oil imports and over 95% of its gas imports originate from these economies.

Precautionary Measures:

• Concerns about potential supply disruptions have prompted precautionary measures, including Pakistan's announcement of austerity steps to conserve fuel.